✔️ EUEA Director K. Polyakova took part in the presentation of the Market Operator regarding the prospects for the implementation of market coupling

Oleksandr Gavva, General Director of JSC "Market Operator" presented to the representatives of business associations and experts of the energy sector his vision regarding the further development of the electricity spot market of Ukraine. During the discussion, it was emphasized that for the further development of the electricity market of Ukraine, it is important for market participants, including consumers, to implement market, credit and operational risk management. "The development of forward and financial markets, as tools for hedging market risks, will contribute to the development of the electricity spot market and its evolution from a tool for minimizing imbalances to a tool for ensuring physical supply (subject to financial price hedging). As it was in Germany, Scandinavian countries, Italy and other developed countries", Oleksandr Gavva emphasized during the meeting.

Presentation from the meeting is attached.

✍🏻The President has signed the law to prevent abuse in wholesale energy markets

By Law №5322, Ukraine implements the REMIT Regulation - a set of European rules that prevent abuses in the energy markets (electricity and natural gas markets) and provides for the liability of market participants for such abuses. The law contains provisions aimed at implementing anti-abuse measures, prohibiting manipulation, disclosure of insider information, mandatory reporting of suspicious transactions and conducting investigations of abuse.

Among the other changes introduced are also the extension of technical conditions for renewable energy facilities (except solar power plants) for 2 years until December 31, 2024, the extension of the pre-PPA for one year and the determination of the allocation of Ukrenergo funds from the crossing for the entire year 2023 (10 % for maintenance and increase of bandwidth, 45% for payment of debts in the balancing market, 45% for payment to the "Guaranteed Buyer").

✔️ Ukraine eases currency control restrictions, allowing repayment of certain external loans from foreign lenders

The National Bank of Ukraine (“NBU”) recently allowed Ukrainian borrowers to transfer foreign currency (“FX”) funds abroad to fulfil their obligations under the following categories of loans from foreign lenders:

• loans backed by way of guarantee or surety from international financial institutions (“IFIs”);
• loans granted, insured or backed by way of guarantee or surety from foreign export credit agencies (“ECAs”) or foreign states through authorised institutions or foreign companies which have a foreign state or a foreign state bank among their shareholders; and
• new loans granted after 20 June 2023 by foreign lenders by way of disbursement of such loans to Ukrainian borrowers’ bank accounts opened with Ukrainian banks.

To recap, following the Russian invasion of Ukraine, the NBU introduced a moratorium on FX cross-border payments for the period of martial law in Ukraine. As a result, repayment of FX loans from foreign lenders was and remains prohibited unless such repayment falls within the exhaustive list of statutory exemptions.

Exemptions for the first two categories of loans took effect on 16 June 2023. As a result, Ukrainian borrowers have been granted the opportunity to repay these categories of loans (including both principal and interest) under the terms of their respective loan agreements.

Exemptions for the third category of loans took effect on 21 June 2023. Ukrainian borrowers would be able to transfer the funds for fulfilling obligations under such loans, subject to compliance with the following cumulative conditions:

• the maximum interest rate under such loans should not exceed 12% per annum;
• borrowers must repay the loans with maturities of up to three years with their own funds;
• if the maturity period of the loans exceeds three years, the borrower may purchase FX for the repayment of principal, interest, commissions, fees and fines starting with the fourth year only.

At the same time, for all three categories of the above mentioned loans, the NBU prohibited (a) early repayment of such loans and (b) amendment of loan agreements to shorten the repayment periods.

✔️ With the support of the Ministry of Energy and the Federal Ministry of Education and Scientific Research of Germany, an educational initiative on the implementation of the EU GreenDeal course is launched in Ukraine

The project aims to contribute to Ukraine's accession to the EU, "green" economic transition and recovery. During the meeting, the details of the implementation of the initiative were discussed by Deputy Minister of Energy of Ukraine Yaroslav Demchenkov, representatives of the German research center Helmholtz Center Berlin and the Polish non-governmental professional organization Forum Energii. Yaroslav Demchenkov emphasized that Ukraine is interested in cooperation with international organizations and educational platforms to study foreign experience and implement best practices that will make it possible to strengthen the stability of the energy system and implement its decentralization. He also drew attention to the importance of the system of acquiring new professions and improving qualifications, which the industry will require during the reconstruction of the energy sector. Details.

🤝Ukraine and Bulgaria will cooperate in the field of nuclear and "green" energy

As part of the official visit of the President of Ukraine Volodymyr Zelenskyi to the Republic of Bulgaria in the presence of the Head of State of Ukraine and the Prime Minister of Bulgaria Mykola Denkov, a Memorandum of Understanding was signed between the Ministries of Energy of Ukraine and the Republic of Bulgaria on cooperation in the field of energy. Taking into account Ukraine's status as a candidate for joining the European Union and Bulgaria's obligations as an EU member state, the parties agreed to intensify further mutually beneficial cooperation in the field of nuclear energy, "green" energy, hydrogen, energy storage systems and "smart" grids. The exchange of knowledge and experience regarding the protection of energy infrastructure from physical, electromagnetic and cyber threats is also a priority in cooperation. Details.

👉🏻 The restoration of the Mariupol metallurgical plants using "green" technologies will take up to five years

Resumption of production at Mariupol's Azovstal after reconstruction with the use of "green" technologies may take three to five years, said Yuriy Ryzhenkov, director general of the Metinvest group. He added that if we talk only about Mariupol, then Metinvest has a vision of its restoration. Therefore, the city needs a new strategy, in particular an industrial strategy. "We have no desire to restore the old technologies that existed at the Azovstal metallurgical plant, because they are already outdated. Today, the whole world is moving towards green metallurgy, towards electrometallurgy, and the restoration of our factories in Mariupol will take place in this direction. Therefore, the restoration of production according to new green technologies will take more time, because it will have to be built practically from scratch. It will take three to five years," Ryzhenkov said. Details.

💲KSE estimates the direct damage from the destruction of the Kakhovskaya HPP at $2 billion

The amount of direct damage caused by the explosion of the Kakhovskaya HPP is already at least $2 billion. The tragedy led to significant damage to the housing and utility sector and the energy industry, as well as significant indirect damage to agriculture due to the loss of irrigation in the region. This is evidenced by the first analysis carried out within the framework of the "Russia will pay" project by the KSE Institute team.

More than a quarter of the total amount of losses due to the blow-up of the HPP — $586 million — is directly related to the destruction of the Kakhovka HPP, which has a capacity of 334.8 MW and is not subject to restoration, and the dam. The total losses of the power industry reached $624 million. The annual economic losses caused by the destruction of the hydroelectric power plant to the state company Ukrhydroenergo amount to more than $100 million. The needs for the construction of a new HPP of similar capacity will amount to about $1 billion. Details.

Sincerely,

EUEA Team
Dorogozhytska str., 3, UNIT City, building B9, office 5, Kyiv, Ukraine
Mobile (WhatsApp): +38 091 331 0010
mailto: office@euea-energyagency.org